U.S. GDP growth decelerated to a 1.1% annual rate in the first quarter of 2023. Economic growth has been slowing for two consecutive quarters after reaching 2.6% in Q4 2022 and 3.2% in Q3 2022.
- Strong
consumer spending fueled growth in the first three months of the year
but a slowdown in the housing market and a drop in business investment
created downward pressures.
- A significant drop in home sales and lower manufacturing output in March have stoked fears of a recession in the second half of 2023.
- The failure of two mid-sized banks in March has fueled concerns about the health of the financial system.
- Boston
College economics professor Brian Bethune said that smaller companies
that can't issue bonds will be particularly hard-hit by the pullback in
bank lending and a broader credit crunch.
- Economists
surveyed by the Wall Street Journal project that economic growth will
be stagnant in the next three quarters before reaching nearly 1% in the
first three months of 2024.
- The U.S. economy averaged 2.2% annual economic growth in the decade before the COVID-19 pandemic.
